November 2017

7th Zurich Regional and Global Headquarters ConferenceSwitzerland in a global setting – securing the benefits while managing the costs

PwC

08.05–8.35 Opening – Switzerland in a global setting

08.35– 9.15 The European Union – inside the machines

9.15–10.00 Location Switzerland – risks and opportunities

10.00–10.15 Overview on break-out sessions

10.15–10.40 Break

10.40–11.40 Break-out sessions, round 1Topic 1: Income tax accounting – dealing with uncertainty and transparencyTopic 2: Innovative cost management: digital in finance organizationsTopic 3: Swiss tax update in the international context

11.40–12.45 Lunch and networking

Morning

PwC

12.45 – 01.45 Break-out sessions, round 2

01.45 – 02.30 US tax reform latest updates

02.30 – 03.15 Panel discussion: perspectives on the future of Switzerland in a global setting

03.15 – 03.30 Conclusions followed by networking

Afternoon

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November 2017

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PwC Events and Community Switzerland

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November 2017

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November 2017

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Test-question

Which celebrity was not a guest of the Kameha?

1) Robbie Williams

2) Anastasia

3) Elton John

4) Katy Perry

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November 2017

Opening – Switzerland in a global setting

Dieter Wirth, Partner, PwC Switzerland

PwC

Countries want to …

• Retain existing capital

• Attract steady, long-term investment

Businesses look for …

• Predictability

• Certainty/Sustainability

• Integration and openness

Opening

• A precondition for growing sustainably is the right mix between …

Good infrastructure

Attractive taxes: predictable and fair

Stable social and political environment

Effective legal system

Access to latest technological developments - universities

Flexible and accusable well educated labour market

Trusted environment

Common interest

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The European Union – inside the machines

EU Tax dynamics

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November 2017

Stef van Weeghel, Global Tax Policy Leader, PwC Netherlands

PwC

Agenda

1. The role of the EU institutions

2. EU BEPS

3. Activism in the European Parliament

4. State aid

5. The role of NGOs

6. Transparency overview

7. Political and economic developments and impact on EU Tax agenda

8. Appendix- CC (C )TB

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November 2017

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● EU-level decision-making on TAX always starts with Commission proposal, which is then sent toCouncil (EU-28 Member States) for adoption, after consultation of the EU Parliament

● Commission: right of initiative EU tax legislative proposals, executes political agenda of its President, butseeks buy-in from Parliament & stakeholders; EU can go beyond BEPS

DG TAXUD: development & coordination of tax policy across EU, Control of application EU law

DG COMP: competition watchdog; EC fiscal State aid decisions, only subject to EU Court review

● Council (ECOFIN): adopts TAX legislation by unanimity, formally consults Parliament

NB: Member States have retained autonomy for Direct Taxation within the EU

● EU Parliament: only directly democratically elected EU body, only advisory role on TAX, but gainedinfluence; activist role: apply maximum political & media pressure on Member States and the Commission

Temp. committees on tax rulings (TAXE I + II) following LuxLeaks, and tax evasion, tax avoidance andmoney laundering (PANA) following Panama Papers

Political, no legal control function, non-binding recommendations for further EU legislative action onfairer taxation, more transparency, anti-tax avoidance

The role of EU institutions

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November 2017

PwC

EU BEPS

• Background to “EU BEPS”

- Turning point: “LuxLeaks” Nov. 2014

- Since then unprecedented EU action

- ATAD1 and ATAD2 sometimes go further than OECD

• What’s driving this?

- EU as global actor, first-mover, frontrunner

- “Leaks/scandals”, public opinion, media, NGOs

- OECD & EU competition

- EU politics & decision-making process

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November 2017

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What’s on the EU’s tax agenda?

• Implementing BEPS in Europe

• Proposed EU directives:Public CBCR, Effective dispute resolution mechanism, recast of Interest & Royaltydirective, CCTB and CCCTB, Disincentives for advisors, promoters and enablers of aggressive tax planning schemesresulting in tax avoidance or evasion

• EU & rest of world: EU blacklist non-EU non-cooperative tax jurisdictions

• Code of Conduct Group (business tax): stop harmful tax practices

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November 2017

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State aid investigations

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November 2017

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Political Activism of the EP

• TAXE I“Stresses that tax avoidance by some MNCs can result in close-to-zero effective tax rates for the profits generated in European jurisdictions, highlighting the fact that such MNCs, while benefiting from various public goods and services where they operate, do not pay their fair share”

• TAXE II“Regrets that many multinational enterprises heard have not strongly condemned tax avoidance practices and aggressive tax planning”

• Panama Papers Inquiry Committee

"Anyone who thinks globalisation is a good thing must be willing to address its darker sides, of which tax secrecy is one,” Joseph Stiglitz

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November 2017

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The role of NGOs

• Oxfam Novib report May 2016: ‘Developing countriesmiss 100 billion of revenue’

• Tax Justice Nederland:

‘30.000 signatures for fairer taxation’

• Greens November 2016:

‘BASF avoids 923 million euro of taxes’

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November 2017

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ActionAid, Christian Aid and Oxfam - Approaching tax responsibility beyond legal compliance

Tax responsibility as a process by ActionAid, Christian Aid and Oxfam:

Key principles Key issue areas

Transparency 1. Tax planning practices

2. Public transparency and reporting

3. Non-public disclosure

Assessment 4. Relationships with tax authorities

5. Tax function management and governance

6. Impact evaluation of tax policy and practice

Improvement 7. Tax lobbying/advocacy

8. Tax incentives

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November 2017

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To a transparent tax world

•• OECD Standard for AEOI• CBR• EU exchange of x-border

rulings / APAs• FATCA• CRS

• Extractive industries transparency initiative

• Voluntary CbCR disclosures

• Cooperative compliance arrangements

• US Sec 1504 Dodd Frank • EU Accounting Directive• EU capital requirements

regulation and directive –CRR/CRD IV

• Public CbCR

• UK DOTAS• US FATCA• BEPS Action 11• BEPS Action 12• BEPS Action 13

Mandatory disclosures to

tax admin-istrations

Mandatory public

disclosures

Exchange of information between tax

admini-strations

Voluntary disclosures

beyond statutory

obligations

UBO register: public or for EoI only?

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November 2017

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Political and economic developments and impact on EU Tax agenda

• Brexit

• Digital Economy

• US Tax Reform

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November 2017

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Appendix: C(C)CTB

CCTB proposal

• Mandatory set of rules for a common tax base for companies (incl. EU PEs) belonging to a consolidated group for financial accounting purposes with a total consolidated group revenue >€750m + voluntary opt for the rest

• PE definition for EU PEs• Broadly designed tax base • Interest limitation rule • “Allowance for Growth and Investment” • Depreciation rules• Losses+temporary cross-border consolidation of

losses until the adoption of the CCCTB Directive• General and special anti-tax avoidance provisions• Hybrid and tax residency mismatches• Implementation: 1 January 2019

CCCTB proposal

• Same scope as the CCTB proposal• Definition of the group: two-part test based

on control and ownership• Provisions on business reorganizations and

the taxation of losses and unrealized capital gains

• Provisions on withholding taxes• Formulary apportionment: three equally

weighted factors (i.e., labor, assets and sales by destination)

• Administrative procedures:groups will deal with a single tax administration (principal tax authority) in the EU (one-stop-shop)

• Implementation: 1 January 2021

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November 2017

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Location Switzerland – risks and opportunities

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November 2017

Martin Godel, Deputy Head Economic Promotion Activities Directorate, Head SME Policy

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Overview on break-out sessions

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November 2017

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Room Blond 1

Topic 1: Income tax accounting – dealing with uncertainty and

transparency

Room Blond 2

Topic 2: Innovative cost management: digital in finance organizations

Room Milk 2

Topic 3: Swiss tax update in the international context 10.15–10.40 Break

Overview on break-out sessions

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Networking break

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Lunch and networking

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November 2017

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Live video cast from Washington D.C.

US tax reform latest updates

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November 2017

Rohit Kumar, Principal and Leader WNTS Tax Policy Services, PwC USTom Quinn, Partner, PwC US

PwC

Presenter

Rohit Kumar, Partner, Tax Policy Services Practice Leader

Thomas F. Quinn, Partner, International Tax Services

Moderator

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November 2017

App-question

Which of the following best represents your role within your organization?

1) Tax

2) Finance

3) Operations

App-question

When do you expect Congress will pass

US tax reform?

1) 2017

2) 2018

3) Later than 2018

App-question

What do you think would be the most significant change to the US Tax Code?

1) Lowering the corporate rate to 20%

2) Changing from a worldwide to territorial system of tax

3) Accelerated cost recovery for capital investments

4) Reduction in taxes on individuals

PwC

Unified Republican tax reform goals

A tax system that is:

• Simpler,

• Creates more jobs and higher wages,

• Cuts tax rates, and

• Encourages companies to bring back jobs and profits that are offshore.

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November 2017

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*

Tax reform: Possible timeline for success

FY18 budget resolution?*

October

W&M / SFC “Chairman’s Marks?

Nov. / Dec.

Tax committees vote on bills if no votes before Nov.

House & Senate vote on bills

Dec. / Early 2018

House and Senate resolve differences and vote to pass a final bill. Legislation signed into law by President Trump**

Trump Administration US House of Representatives

Speaker Ryan

US Senate

Majority Leader McConnell

Treasury SecretaryMnuchin

Ways &MeansChairman Brady

FinanceChairman Hatch

NEC Director Cohn

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November 2017

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Big Six tax reform unified framework

Business

• 20% corporate tax rate

• 25% maximum passthrough rate for business income of small and family-owned businesses

• Full expensing of capital investments made after Sept. 27, 2017 for at least 5 years

• Partial limitation on net interest expense

• Repeal special deductions and credits, including Sec. 199 domestic manufacturing deduction; preserves research and low-income housing credits

• Create territorial international tax system with 100% foreign dividend exemption

• One-time mandatory deemed repatriation tax on previously untaxed foreign earnings (non-cash assets at lower rate than cash and cash equivalents)

• Rules to protect the US tax base – inbound – outbound

• What is unsaid is as important as what is said

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November 2017

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Big Six tax reform unified framework (con’t.)

Individual

• Tax rate brackets of 12%, 25%, and 35% (an additional top rate may apply)

• Standard deduction almost doubled to $24,000 joint/$12,000 single

• Eliminate most itemized deductions (retain tax incentives for home mortgage interest and charitable contributions)

• Retain tax benefits that encourage work, higher education, and retirement

• Repeal AMT and estate tax

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November 2017

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Key Takeaways

What to look for in the days and weeks ahead• Reaction to statutory language released this week

• Action by tax writers in House of Representatives the week of November 6th

• Action by tax writers in Senate the week of November 13th

• Action on House floor the week of November 13th

• Action on Senate floor early December

What does this mean for operations in Switzerland

• US deferral removed as a consideration if a territorial regime adopted

• Foreign minimum tax would reduce (but not eliminate) the incentive for foreign to foreign base erosion

• New inbound rules may change the economics of ex-US operations

• Any carve out for active business income would incentivize operation in jurisdictions with ability to provide space and workforce.

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November 2017

PwC

Deeper divePwC’s new Inside Tax Policy on-demand video podcasts

• Insights on tax policy changes as they unfold and on the go

• Direct access to PwC’s Washington DC National Tax Services team

• Special guest commentators, congressional leaders, and subject matter specialists content on a wide range of tax-related topics

• Weekly alerts on key regulatory and legislative changes

• For more information and to subscribe to our new podcasts, please visit our Inside Tax Policy page at: www.pwc.com/us/insidetaxpolicy

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November 2017

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Panel discussion: perspectives on the future of Switzerland in a global setting

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November 2017

Arno Groenewoud, VP Global Finance and Tax, Idorsia Ltd.Frederik Devienne, VP Finance EME & APA, AGCORuud van der Hoeven, Head of Tax Europe and Middle East, Johnson Electric

App-question

What key challenges is Switzerland currently

facing impacting the future growth the most?

1) High costs

2) Restrictions on migration

3) Uncertainty with tax reform

4) Relationship with EU

5) Others

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Conclusions

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November 2017

App-question

Would you be willing to travel to Geneva to attend this event in alternate years?

1) Yes

2) No

3) Don’t’ know

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